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Track Days – the insurance position

15th July 2021

Track Days – the insurance position

Andy Shaw, a partner and Head of Personal Injury and Clinical Negligence at Higgs LLP, specialises in catastrophic injury and has a particular expertise in motorcycle claims. He puts track days and associated insurance under the microscope here.

If you ride track days, do you need insurance?

Guidance can be taken from the European Court of Justice ruling in Damijan Vnuk v Zavarovalnica Trigalev.  The case concerned surrounds a farmworker who was knocked off a ladder in a farmyard by a trailer attached to a tractor which was reversing across the yard.  Mr Vnuk sought damages against the Defendant Insurer who insured the tractor.  

The Slovenian courts ruled against Mr Vnuk on the basis that, under Slovenian Law, compulsory insurance for a motor vehicle covered the use of a tractor as a means of transport but did not cover damage caused when the tractor was used as a machine or propulsion device.

A referral was made from the Slovenian Supreme Court to the European Court of Justice to determine whether the circumstances of the accident fell within the duty to insure 'the use of vehicles' within the meaning of Article 3(1).

The European Court ruled that the duty to insure did extend to the accident circumstances in this case. It found that the wording 'use of vehicles' in Article 3(1) covers any use of a vehicle that is consistent with 'the normal function' of that vehicle. The judgment made no specific reference to the duty to insure extending to private property (such as the farmyard in which Mr Vnuk was working) but it seems an inevitable conclusion that the court's view was that it did.

So how does the Vnuk ruling impact motorcycle track days? Prior to Vnuk, if a rider attended a track day and knocked a rider off their bike, the injured rider would be entitled to make a case of negligence against the person who caused the accident.  Essentially, they would need to establish that the rider fell below the standards expected thereafter causing injury or damage.  In the event of establishing negligence, the insurance provider of the bike would not have indemnified the rider for damage caused whilst racing on a track, essentially leaving the rider who caused the accident responsible for meeting those damages.

Following Vnuk, the wider use of the vehicle is taken into consideration. Insurance has to cover any use of the vehicle which is consistent with normal function, which would include motorcycle track days. 

However, insurance is a contract and the level of indemnity provided depends on the terms and conditions of the insurance policy.  Your insurance provider will take a premium based on the risks that they identify.  If a policyholder misleads the insurance provider by stating that they have no intention of using a road bike on a track and then does so, the insurance provider will - in all probability - refuse to provide indemnity in the event of a claim or, more likely, meet the cost of a third party claim and then seek to recover the amounts paid out from the policyholder on the basis of material non-disclosure or misrepresentation  

If a rider is intending to take a road bike on a track, it is important to check with the insurance provider to ensure that the bike is covered and that there are no exclusions. It is also important to check that cover is extended to third party risks, i.e. other parties.

Be warned that bespoke track day insurance may not be the answer when seeking to protect against third party risk.  Most policies exclude third party risk which leaves the rider personally exposed to negligence claims in the even that another rider is injured or who sustains damage to their bike.

 

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